Financial Crimes, Fraud, and Investigation
The banking sector is a critical part of a country’s economy. This is more so the case given that it is actively involved in the holding as well as management of diverse financial assets and the coordination of financial activities for the various other economic sectors. Although at the core of banking is holding of financial assets, other key activities include, but they are not limited to, commercial and personal banking services, insurance, etc. In that regard, therefore, banks happen to be one of the most sensitive sectors in an economy. Bank managers have a responsibility to ensure that all the regulatory standards are observed. Further, they also have a responsibility to ensure that the interests of various stakeholders in the banking sector are secured. The key stakeholders, from the perspective of a bank institution are inclusive of the government and the various regulatory agencies, customers, investors, employees, other institutions in the financial services sector, etc. In seeking to promote transparency – both within and without – the institutional boundaries, banks must adhere to various strict guidelines, restrictions, and requirements. As a matter of fact, the banking industry happens to be one of the most heavily regulated industries in all of U.S. economy. Criminal elements have, however, always found a way of manipulating the system to engage in theft, embezzlement, or other forms of fraud. The said criminal elements could either be employees of the firm, business collaborators, or outsiders working alone or in cahoots with bank employees.

From a broader perspective, crimes in the banking industry could either be violent robbery or white collar crime. This text concerns itself with white collar crime. In basic terms, white collar crime could be defined as “nonviolent crime committed for financial gain” (Zagaris, 2010, p. 113). On the other hand, in the financial services realm, violent robbery is any criminal act that involves the holding up of a bank in a forceful manner with an intention of making away with money or other related gain. Violent bank robberies have been on a steep decline over the last few decades. Towards this end, the types of crimes the banking industry experiences that have been highlighted in this text largely relate to white collar crime. It is important to note that the various kinds of crimes in the banking industry are so diverse that they cannot be discussed in their entirety in a document of this nature. However, it is possible to assess the main kinds of crimes in the said industry.

From a general perspective, financial crimes involving banks could be inclusive of, but they are not limited to; information and identity theft, insider trading, money laundering, electronic crime, and fraud. These could be perpetrated by both employees and their collaborators as well as by outsiders. From a micro perspective, good examples of insider (or insider-perpetrated) bank crimes are inclusive of general ledger fraud, account takeover, and identity theft. In as far as general ledger fraud is concerned, Singleton, Singleton, and Bologna (2006) point out that this particular crime is perpetrated by insiders who “have exclusive access to accounts payable or suspense accounts, which are used to temporarily record items such as loans in process, interdepartmental transfers, or currency in transit” (74). It therefore follows that in such a case, insiders can easily initiate the movement of funds from on account to another. A bank insider could, for instance, make transfers from the general ledger accounts into personal accounts for an extended period of time. Reconciliations and general ledger entries can then be handed accordingly due to an employee’s unfettered access. Secondly, when to comes to account takeover,...…room. Ideally, the employee in question and I should be the only participants. An attorney could be allowed in at the request of the employee.

It is important to note that crimes of this nature are reported to law enforcement officers on a regular basis across the nation. It therefore follows that it would be prudent for banks to embrace various strategies in an attempt to reign in behavior of this kind. These will be explored below. Firstly, in seeking to investigate the present criminal activity, I would essentially track financial transactions in the concerned accounts with an aim of coming up with a forensic reconciliation. In this particular case, affidavits should be presented clearly indicating that the victims did not initiate the transactions in question. In seeking to ensure that internal controls are improved so as to prevent an occurrence of the very same fraudulent activity, there are a number of suggestions that I would make. To begin with, I would recommend that the bank implements systems and processes of red-flagging accounts that could have possibly been compromised. The system should ideally cover credit card, savings, as well as checking accounts and sound an alert (based on some conditioned parameters) when suspicious behavior is detected. Secondly, there is need for the bank to institute audits on a periodic basis. Lastly, and perhaps most importantly, I would recommend that customer addresses be vigorously verified especially in those instances relating to credit card and debit card requests or where there are requests for change of address. It is also important to note that in seeking to protect customers from identity theft threats originating from both within and outside the bank, the bank must engage in customer education – in which case customers are sensitized on the measures that they ought to take to protect their private information.…